Are these Catholic groups religious enough to not pay taxes? The Supreme Court will decide

Independent

31-03-2025

A group of Catholic Church -affiliated charities believes their religious exemptions from a state tax have been unfairly revoked after they were deemed not religious enough, and it appears the U.S. Supreme Court is sympathetic to its case.
The groups involved in the ruling are Headwaters, Barron County Developmental Services, Diversified Services, and Black River Industries. The group are all meant to offer services to people with developmental disabilities, and are open to non-Catholics.
They're arguing that their First Amendment rights to free exercise have been violated by the state of Wisconsin.
In an earlier ruling, the Wisconsin Supreme Court ruled that the groups, which operate under the authority of the Catholic Charities Bureau of the Diocese of Superior weren't religious enough to warrant tax exemption, NBC News reports.
On Monday, the Supreme Court Justices gave their oral arguments and appeared to agree with the charities' arguments.
"I thought it was pretty fundamental that we don't treat some religions better than other religions," Justice Elena Kagan, a liberal, said.
Conservative Justice Neil Gorsuch agreed, asking rhetorically if it "isn't a fundamental premise of our First Amendment that the state shouldn't be picking and choosing between religions."
Central to the debate is whether or not Wisconsin's tests for exemption is too focused on the particulars of how religious faiths operate.
Under Wisconsin law, religious groups that proselytize would qualify for an exemption — like Protestant churches — but Catholic churches, which do not proselytize nearly as much, might not.
Gorsuch pointed to soup kitchens — which are often run by religious organizations and provide food to the needy — and asked if they would require inspection before they'd qualify under Wisconsin's laws.
"Doesn't it entangle the state tremendously when it has to go into a soup kitchen, send an inspector in, to see how much prayer is going on?" he asked.
Wisconsin's Labor and Industry Review Commission ruled that the groups involved in the case were not "operated primarily for religious purposes" under the state's laws.
Last year, the Wisconsin Supreme Court upheld the state commission's decision, offering its opinion at the time that the groups' activities were mostly secular in nature and that they do not 'attempt to imbue program participants with the Catholic faith nor supply any religious materials.'
Wisconsin wants the groups to pay taxes that fund the state's unemployment compensation fund, which aims to provide a safety net for unemployed individuals.
Other Catholic charities have backed the group's case, fearing that a ruling in favor of Wisconsin's state laws could have wide-ranging effects on the tax exempt status of religious-affiliated organizations, including hospitals.
A decision in the case is expected by the end of June.